Why the government shutdown has one private credit manager busier than ever

"Stevens, the founder of private credit firm Grays Peak Capital, provides bridge financing to companies that get government contracts, mostly in the defense sector. His firm is raising his second fund, which will have at least $500 million to put to work but could swell to $1 billion if he finds the right opportunities to entice his backers to contribute more."

"Stevens, a former investor for Steve Cohen's SAC Capital and Philippe Laffont's Coatue, has carved out a niche in the fast-growing private credit space, stepping in when banks or traditional lenders can't. He said it's generally a safe bet to loan to companies awaiting government contracts. Government infrastructure projects, like maritime ports and rural broadband, contract out to private companies to do the work, but "the government is not designed to move quickly" and get them startup capital to begin a project."

Scott Stevens founded Grays Peak Capital to provide bridge financing to companies that hold or pursue government contracts, with a focus on defense-sector contractors. The firm's second fund will have at least $500 million available and could expand to $1 billion if additional commitments follow. Grays Peak fills financing gaps left by banks and traditional lenders for contractors waiting on government payments or project starts. The firm also invests in private equity, venture capital, and real estate. Grays Peak's first private credit fund annualized 16% across 2023 and 2024, after deploying $300 million. The recent government shutdown increased borrower outreach and strengthened the firm's pricing power.

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